Nokia to run 9 Hutchison Essar circles
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Nokia to run 9 Hutchison Essar circles

By agencies   |   Thursday, 26 January 2006, 08:00 Hrs
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MUMBAI: Hutchison Essar will outsource the network operations of nine of its telecom circles to Nokia for a period of five years, freeing itself to focus better on its customers and other core activities.

The document for this agreement is being finalized.

However, some idea of the size of the deal may be had from the contract that Bharti Tele-Ventures entered into with the Sweden-based Ericsson two years ago. For $400 million, Ericsson would manage the cellular network of 13 circles of Bharti for a period of three years. This was then described as the first such deal in the world.

Nokia's contract with Hutchison Essar is for five years; the telecom vendor will assume the operations of Hutchison Essar's networks in Gujarat, Karnataka, Andhra Pradesh, Chennai, Uttar Pradesh (East and West), Rajasthan, Haryana, and West Bengal. The contract is likely to work out to a similar size as Ericsson's, there are fewer circles than in the Bharti contract, but the contract period is for longer, said market experts.

Over 600 Hutchison Essar staff will join Nokia's services business unit. Nokia will provide an array of solutions from its extensive services portfolio to Hutchison Essar. This will include network planning, project management, configuration and optimization, network operations and maintenance and the administration of third party vendor contract management.

Nokia is already the supplier of GSM network equipment to nine of Hutchison Essar's 13 circles, making it the largest network vendor for the operator.

"Nokia's Managed Service know-how, plus its proven track record when it comes to operating and enhancing networks worldwide, were key drivers in helping us make this decision," said Asim Ghosh, Managing Director, Hutchison Essar.

"The services business has become increasingly important for Nokia. Our managed services will improve Hutchison Essar's cost structure and further enhance their service offerings," Rajeev Suri, Senior Vice-President - Networks, Nokia, said.

To date, Nokia has 36 managed services contracts in 28 countries, and it expects this figure to grow in the coming years.

This kind of outsourcing is a sign of the maturity of the Indian telecom sector. Service providers leave outsource specialized jobs to the specialist and concentrate on product innovation and actual services, according to analysts.

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